Crowdfunding Is Becoming a Leading Source of Finance


We already know that crowdfunding can offer growing companies an infusion of cash that will help them to grow even more. With billions invested every year, 2016 may become the year when we really see this platform take off. In the past, the only rewards that backers have received are the products, services, or experiences they’ve purchased. All of that is about to change with equity crowdfunding becoming more available.

Case In Point: Oculus Rift

10,000 backers gave Oculus Rift $2.5 million in crowdfunding dollars in 2012. They were able to purchase several different reward levels for this virtual reality headset developer. At the time, everyone was quite happy with the idea that they could be involved with this growing company’s future.

Then Facebook purchase Oculus Rift for $2 billion. Those 10,000 backers didn’t see any sort of payday from their initial investment. Their rewards weren’t based in equity. They were based in tangible products and experiences. They’d already received their payday.

Crowdfunding is transitioning from a solely short-term investment opportunity to a long-term investment opportunity. That’s why 2016 could be explosive for the industry as the US finally finalizes rules for equity crowdfunding.

Look For More Crowdfunding Opportunities

Crowdfunding is also branching out into new financial sectors. You’ll be able to get involved with debt crowdfunding, medical crowdfunding, and non-profits will continue to raise money using this platform. What makes it so attractive is that it puts backers and entrepreneurs together in a natural way so that relationships can be formed. There’s no need for the awkward 30 second elevator pitch any more.

Put your idea online. Prove your concept. Demonstrate your value. In doing so, you’ll find backers headed your way.

This means new pools of capital will compliment the existing forms of finance. Households across the world will join with venture capitalists, angels, and traditional backers to build a strong foundation for the world’s entrepreneurs. If they get involved with equity crowdfunding, then they’ll get a piece of the profits that backers into Oculus Rift didn’t receive.

Crowdfunding will become a leading source of finance in the future. The only question we have left to consider is this: how big could crowdfunding become?